Today, the Central Bank's Board of Directors has reduced the discount rate (the interest rate on loans provided to commercial banks in manat) from 7.25 percent to 6.75 percent.
Economist Natiq Jafarli said in an interview with Medianews.az that the Central Bank's decision was expected: “This is a correct, logical decision. Compared to previous years, the current leadership of the Central Bank almost always announces or allows forecasting of the steps it will take in the future. The US Federal Reserve System, the European Central Bank, and other major banks are reducing interest rates. Azerbaijan is also taking steps in accordance with this situation.”
N. Jafarli stated that the reduction of the discount rate from 7.25 percent to 6.75 percent will not be immediately felt in the banking sector or the economy: “Therefore, this process must be continuous. That is, if the Central Bank’s Board of Directors makes decisions to reduce the discount rate in subsequent meetings as well, then after some time the impact on loans may be felt, and loans could become cheaper. Although this is not directly related to the discount rate, because deposits in our country are expensive.”
In Azerbaijan, the maximum discount rate was 13 percent in 2007 and 2018, 15 percent in 2008, 2016, and 2017, 5 percent in 2009 and 2012, 3 percent in 2010 and 2015, 5.25 percent in 2011, 4.75 percent in 2013, 4.25 percent in 2014, 9.25 percent in 2019, 7.25 percent in 2020 and 2021, 8.25 percent in 2022, 9 percent in 2023, and 7.75 percent in 2024.
Nailə Qasımova,
Medianews.az
